The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run, equilibrium real GDP will A) increase by $50 billion. B) decrease by less than $50 billion. C) increase by less than $50 billion. D) decrease by $50 billion.

The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run, equilibrium real GDP will A) increase by $50 billion. B) decrease by less than $50 billion. C) increase by less than $50 billion. D) decrease by $50 billion.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section: Chapter Questions

Problem 10QP

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Question

The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run,
equilibrium real GDP will
A) increase by $50 billion.
B) decrease by less than $50 billion.
C) increase by less than $50 billion.
D) decrease by $50 billion.

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